Shareholders in Serinus Energy plc (LON:SENX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
Following the upgrade, the latest consensus from Serinus Energy's three analysts is for revenues of US$54m in 2022, which would reflect a sizeable 36% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 41% to US$0.011. Before this latest update, the analysts had been forecasting revenues of US$47m and earnings per share (EPS) of US$0.0061 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that the analysts have increased their price target for Serinus Energy 11% to UK£0.059 on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Serinus Energy at UK£0.064 per share, while the most bearish prices it at UK£0.055. This is a very narrow spread of estimates, implying either that Serinus Energy is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Serinus Energy's past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 36% growth on an annualised basis. That is in line with its 32% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.6% annually. So although Serinus Energy is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Serinus Energy could be worth investigating further.
Analysts are definitely bullish on Serinus Energy, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.